The Australian Conservation Foundation (ACF) has threatened legal action over comments made by a Tasmanian Liberal MP that eco-charities may be using tax deductible donations to fund illegal activism.

The Member for Bass, Andrew Nikolic, raised a motion on Sunday at the Federal Liberal Council meeting, calling for the Government to strip eco-charities of the same rights permitted to other charities.

It is a point the ACF has taken offence to. The group has sent a letter to the Tasmanian MP urging him to withdraw his comments.

"I do believe that ACF engages in advocacy to further an environmental protection objective - this is one that is absolutely lawful," ACF's general counsel Elizabeth McKinnon said.

"The Charities Act makes it very clear that advocacy and even lobbying activities that further a charitable purpose is not unlawful or inconsistent with that charitable purpose.

"So even before the Charities Act was enacted in Australia, the recognition of protection of the natural environment as a charitable purpose was well entrenched in the common law which dates back to the 1600s in England.

"So it's very well established in the law that protection of the environment provides a benefit or value to the community just in the same way that relief of poverty does or advancement of education does."

Ms McKinnon says the ACF is considering legal action.

"We're obviously looking at all the options available but we'd like to give Mr Nikolic the opportunity to respond first," she said.

"Certainly we think that it's possible to substantiate the allegations of the kind that have been made of ACF are damaging to ACF's reputation, for example people that support us and donate to us.

"If they were to believe that we were engaged in illegal activities, that would be very concerning to us."